09/08/2014 06:26 EDT | Updated 11/08/2014 05:59 EST

Audit of old Lubicon finances raises questions, says elected chief

LITTLE BUFFALO, Alta. - A forensic audit of the Lubicon Cree's development corporation has raised questions about payments to other leaders, the Alberta band's elected chief said Monday.

"The audit confirmed what our belief was —that quite a bit of money was made and it only stopped with a certain group of people," said Billy Joe Laboucan of the Lubicon Lake Band.

Laboucan, who was elected chief in 2013, says millions of dollars in unexplained payments have been made to Bernard Ominayak and his family from the Cree Development Corp.

A spokesman for Ominayak — who remains the traditional chief of the separate Lubicon Lake Nation — said Ominayak was being reimbursed for payments he made to the corporation's creditors.

"Any payments that did go out are all justified and they would all be reimbursing for expenses because the Cree Development Corp. had very little borrowing power," said Garrett Tomlinson. "In most cases, the directors would take on expenses personally and be reimbursed after the fact."

The Lubicon have been in the news since the 1980s about resource development on their traditional lands and their unresolved land claim in northern Alberta. That claim led to a split in band leadership. Laboucan's group was recognized by the federal and Alberta governments after conducting an election held under federal rules.

Cree Development is a private corporation owned by the Lubicon Lake Nation that earns revenue by contracting services such as roadbuilding and lease construction to the energy industry. Ominayak as well as other band councillors sit as directors.

Documents collected by the auditors say Ominayak and his family members received about $3.3 million between 2006 and 2009. Over those years, a total of $27.5 million was spent.

That conclusion was based largely on an analysis of corporation cheques and bank statements. It covers the years 2006 to 2012.

The auditors acknowledge they did not review accounting or business records.

Laboucan said little of the corporation's spending has gone to benefit the community.

"I'm not sure how they spent the money or where they spent the money," he said.

Laboucan suggested records were destroyed. He also said Ominayak distributed its revenues preferentially to his supporters.

Tomlinson said benefits from the corporation are throughout the Lubicon community of Little Buffalo, including $10 million paid out in salaries. Other money paid for services once provided by the federal government, he said.

He said complete records are available at the band's office.

Tomlinson said the release of the audit — which he said was based on documents wrongly taken from the corporation's bank in 2009 — was intended to undercut Ominayak's authority.

Laboucan said he's just trying to resolve the split between the two groups of Lubicon Cree, who remain impoverished.

The auditors recommended a number of steps, including interviewing officers of the corporation and examining its business records. They also recommended better accounting practices, more frequent reporting and the separation of band leadership and directorship of the corporation.